Victoria Feed-in Tariff: Things to know

Update 8 Dec 2011: The Victoria Premium Feed-in Tariff has been replaced with a Transitional Feed-in Tariff Scheme.

Update on Victoria Solar Feed-in Tariff, 1 September 2011: Deadline to have systems installed for the 60c/kWh rate is 30 September 2011.

Update on Victoria Premium Solar Feed-in Tariff, 10 August 2011: The scheme is close to capacity. Click here for more details or get a free comparison of solar quotes of the installers who operate in your area of Victoria.)


Victoria offers a very generous feed-in tariff: currently a minimum of $0.60/kWh on the Victoria premium feed-in tariff scheme. The Victoria feed-in tariff scheme cap is 100MW of installed solar capacity, and as of 31 May 2011 installations stood somewhere in the range of 70MW, although this is subject to confirmation by electricity providers in their next report to the Victoria Department of Primary Industries (DPI). According to the DPI, this cap is expected to be reached around August, the clock is ticking to get a system and get grid-connected! Read more below for other key facts about the Victoria feed-in tariff.
Once you as a customer are on the  Victoria Feed-in Tariff scheme, the 60c/kWh rate is guaranteed until 1 November 2024, or 15 years from the start of the scheme.
Another thing to note is that the cap is only for the premium FiT, and that even after the cap is reached, customers will still be eligible for the Standard FiT (for which all renewable energy sources are eligible–including solar). Here’s where things become a bit less clear-cut: the Standard FiT is not a set rate, but instead will be a rate determined as ‘fair and reasonable’ in the agreement between the electricity provider and the customer. It is expected to be a 1:1 feed-in tariff, where customers are paid an equal amount

In the FAQ describing the criteria for ‘fair and reasonable‘, one of the clauses reads as follows:
An offer must:
(a) specify that the retailer will pay or credit the customer, for electricity supplied by the customer under a feed-in contract, at a rate not less than the rate the customer pays to buy electricity from the retailer; and
(b) use as the basis for this calculation the cost of the bill received by the customer, excluding the service to property charge and government charges.


In essence, this means the retailer can’t pay less for the fed-in solar-generated electricity than the customer pays for the electricity they consume from the grid, and that ‘service to property’ and ‘government’ charges are not included in the price. This type of pay arrangement is often referred to as ‘net-metering’, or a 1:1 (one-to-one) solar tariff.

Something for would-be FiT recipients to be careful of: some retailers may charge admin fees for feed-in tariff recipients, but generally this is not the case! (Please read more about the FiT rates provided by Victorian electricity retailers in our previous blog entry.)
However, as pointed out above, this higher rate still cannot exceed what the customer is getting paid to feed into the grid, so there is a safety net, which means there are still lots of opportunities for savings. Recipients on the current 60c/kWh Premium tariff may also be on higher rates, although this should have been explicitly laid out in the contract with the electricity provider, according to the ‘fair and reasonable’ criteria (i.e.:  the provider “must identify all additional costs related to the feed-in contract which the customer will pay”).
A strong recommendation for those considering getting a solar power system in Victoria is to shop around with electricity retailers. Different retailers offer different rates and different deals. Some of them might charge less than others for electricity to feed-in customers, and some might offer higher FiTs than others. There is some degree of competition in the market, so there are options available. Additionally, if you receive the premium FiT you stand to benefit quite well financially and future-proof yourself against rising electricity prices. All Victorian feed-in tariffs are net tariffs, so wise timing of electricity consumption means additional opportunities to save money on electricity bills.

Solar Choice can help you determine the best deal for solar systems in your area of Victoria! Request a comparison of solar quotes.

Written by James Martin

Solar Choice Analyst

© 2011 Solar Choice Pty Ltd

Sources and Links:

Victoria DPI, Premium Feed-in Tariff FAQ (pdf)
Victoria DPI, Standard Feed-in Tariff FAQ
Victoria DPI, Premium Feed-in Tariff Criteria (pdf)
Victoria DPI, “Fair and Reasonable” Criteria for Standard Feed-in Tariff (pdf)

James Martin II

Contributor at Solar Choice
James was Solar Choice's primary writer & researcher between 2010 and 2018.

He is now the communications manager for energy technology startup SwitchDin, but remains an occasional contributor to the Solar Choice blog.

James lives in Newcastle in a house with a weird solar system.
James Martin II

Comments

  1. Hi, My wife and I are in the very early stages (probably a year or so away from completion) of building and had been considering installing a solar electricity system hooked up to the grid. However after reading that the premium feed in tariff input is close to being capped it seems it is no longer worth it.

    This is of course in addition to a reduction in the Government rebates over the next year or so.

    Am I right in assuming that most companies will only pay the base rate when negotiating a Standard feed in tariff price?

    1. Hi Paul,

      Unfortunately it looks like you will miss out on the more lucrative feed-in tariff in Victoria, but Victoria, being a sensible, renewables-friendly state, will (fingers crossed) likely instate a 1:1 net feed-in agreement, where you get paid the same rate that you get charged by your retailer for every kW of electricity that your system feeds into the grid. That’s what’s happened on the ACT, and that’s precisely what everyone is hoping for in NSW.

      Some Vic electricity retailers may offer a higher rate than what they are obligated to pay, especially if you are in a remote area where having a high concentration of solar systems would be a benefit to the network.

      Where are you located and which retailers operate in your area?

Comments are closed.